Viewership of online videos has continued to rise, as the Nielsen Company showed in a study released this week. As everyone knows, the online video market is far short of delivering solid profits for media and entertainment companies, but one analyst expects the market to reach a critical mass in 2011.
U.S. Web users spent an average of 212 minutes watching online video in the month of July, an increase of 42 percent compared to the year before, the Nielsen study said. The latest spike in online video viewing for July also marked a 12 percent increase over the month before.
Time spent watching YouTube.com, a division of Google Inc was up 39 percent. At Hulu.com, a website owned in part by NBC Universal, Fox Entertainment Group and ABC network, time spent watching online video was up 34 percent.
The numbers are encouraging for websites that show and produce online video, but the industry has been largely unable to generate profits because of low advertising rates and consumer reluctance to pay for content.
Dan Rayburn, an online video expert and principal analyst at Frost & Sullivan, said the spike is the latest of "several sudden surges" that have occurred in the sector.